DATE=5/31/98
TYPE=CORRESPONDENT REPORT
NUMBER=2-233089
TITLE=INDIA / BUDGET / L-O
BYLINE=ANJANA PASRICHA
DATELINE=NEW DELHI1
CONTENT=
VOICED AT:
INTRO: INDIA'S HINDU NATIONALIST GOVERNMENT PRESENTS ITS FIRST
BUDGET MONDAY UNDER THE SHADOW OF ECONOMIC SANCTIONS IMPOSED BY
WESTERN COUNTRIES OVER THE NATION'S RECENT NUCLEAR TESTS. FROM
NEW DELHI, ANJANA PASRICHA HAS A PREVIEW.
TEXT: IN ITS PRE-BUDGET ECONOMIC SURVEY, THE GOVERNMENT SAYS IT
IS TOO EARLY TO ASSESS THE IMPACT OF ECONOMIC SANCTIONS IMPOSED
BY THE UNITED STATES, CANADA, JAPAN AND OTHER COUNTRIES.
BUT IT WARNS THE TASK OF ENSURING ECONOMIC STABILITY AND RAPID
GROWTH HAS BECOME NECESSARY IN THE FACE OF SANCTIONS.
THERE IS NO CLEAR ASSESSMENT ON THE IMPACT OF THE SANCTIONS ON
THE INDIAN ECONOMY. BUT CUTS IN AID ARE EXPECTED TO WORSEN A
REVENUE DEFICIT CONFRONTING THE GOVERNMENT. AND THERE ARE FEARS
A BAN ON AMERICAN BANKS LENDING TO THE INDIAN GOVERNMENT COULD
CHILL OVERALL INVESTMENT.
ANALYSTS SAY THE ECONOMY WAS AILING EVEN BEFORE THE SANCTIONS
CAME. INDUSTRIAL AND EXPORT GROWTH ARE SLIDING AND INVESTMENT
HAS BEEN DEPRESSED. SEVEN YEARS AFTER LAUNCHING AN ECONOMIC
REFORM PROGRAM TO WOO FOREIGN INVESTORS, INDIA'S INFRASTRUCTURE
STILL NEEDS MASSIVE FUNDING.
THESE ARE MANY OF THE PRESSURES THAT CONFRONT FINANCE MINISTER
YASHWANT SINHA AS HE PUTS THE FINAL TOUCHES ON THE FEDERAL BUDGET
HE WILL PRESENT TO PARLIAMENT MONDAY. HE HAS SAID HE FOUND THE
ECONOMY IN WORSE SHAPE THAN HE EXPECTED WHEN HE TOOK CHARGE, TWO
MONTHS BACK.
ANALYSTS SAY THE FOCUS IN MONDAY'S BUDGET WILL BE ON REVIVING
GROWTH. THE BUDGET IS ALSO EXPECTED TO CONTAIN STEPS TO PERSUADE
FOREIGN COMPANIES TO DO BUSINESS IN INDIA, DESPITE THE SANCTIONS.
IN THE WAKE OF THE NUCLEAR TESTS, ATTENTION IS ALSO FOCUSSED ON
THE DEFENSE BUDGET. ECONOMISTS ARE WARNING THE GOVERNMENT
AGAINST A COSTLY ARMS RACE BECAUSE ANY LARGE INCREASE FOR DEFENSE
WILL MEAN CUTTING BACK ON SOCIAL SECTORS.
// REST OPTIONAL //
MEANWHILE, AN OPINION POLL PUBLISHED BY THE "TIMES OF INDIA"
NEWSPAPER SAYS 46 PERCENT OF INDIANS FEEL THE IMPACT OF THE
SANCTIONS WILL BE MILD. TWENTY-NINE PERCENT SAY IT MAY BE SEVERE
AND THE NATION SHOULD BE EXPECTED TO MAKE SACRIFICES. (SIGNED)
NEB / WD / WD
31-May-98 7:56 AM EDT (1156 UTC)
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Source: Voice of America
.